Intel posts modest revenue growth

If Gartner’s latest estimates are any indication, the PC market isn’t faring too well. Shipments were purportedly down 0.1% last quarter, and they’ve been continually underwhelming for almost two straight years now.

Apparently, though, poor market conditions haven’t stopped Intel from enjoying continued sales growth. The chipmaker’s freshly published second-quarter results list revenue of $13.5 billion, up 4% over the same same quarter a year back. Profits slipped by about 7% year-over-year, but they were up 3% from the first quarter of 2012.

Intel CEO Paul Otellini comments, “The second quarter was highlighted by solid execution with continued strength in the data center and multiple product introductions in Ultrabooks and smartphones.”

  Q2 2011 Q1 2012 Q2 2012
Revenue $13.0 billion $12.9 billion $13.5 billion
Net income $3.0 billion $2.7 billion $2.8 billion
Gross margin 61.0% 64.0% 63.4%

Otellini only mentions inauspicious PC market conditions in reference to Intel’s forecast for the ongoing quarter. “As we enter the third quarter, our growth will be slower than we anticipated due to a more challenging macroeconomic environment,” he says. Nevertheless, Intel expects third-quarter revenue to reach $14.3 billion with a gross margin of 61-65%, which wouldn’t compare unfavorably with the $14.2 billion revenue and 63.4% margin it posted for Q3 2011. The chipmaker expects revenue growth of 3-5% for the whole of 2012, as well.

All of this tells us AMD might be underperforming compared to its chief rival in the CPU market. A week ago, AMD warned that its second-quarter results wouldn’t meet expectations, with revenue predicted to fall by “approximately 11%” instead of rising by 0-3% as previously anticipated. AMD blamed the revised forecast on slumping demand in China and Europe as well as a “weaker consumer buying environment” that lowered its sales to PC makers.

Comments closed
    • Auril4
    • 7 years ago

    Since Intel is a master of kickbacks, threats and coercion when it comes to its partners… it will be hard for the comapny to not have any revenue growth no matter how bad the global economy is.

      • NeelyCam
      • 7 years ago

      “What do you want to do when you grow up?”

      Timmy: “I wanna drive a waambulance!”

      “And someday you will, TImmy! But here’s a pacifier; you’re bothering your father”

    • Krogoth
    • 7 years ago

    Tablets and Smartphones are eating the mainstream crowd and there’s no killer app for desktop/gaming market that needs anything more than what quad-core CPUs of yesterdays can muster.

    • ronch
    • 7 years ago

    Let’s all help AMD. Go get your FX processor today!

      • tfp
      • 7 years ago

      Yes need to replace my Q9400 and I should go out and buy a new MB, RAM, and a FX processor. Going with a FX processor is a good choice because I could expect to see very little improvement in performance for what I do.

      Where do I sign up?

        • ronch
        • 7 years ago

        Newegg. Tigerdirect, Microcenter… Take your pick.

    • Anarchist
    • 7 years ago

    as we’ve seen countless times, with JP morgan the most recent outstanding example, the earnings report is nothing but a hocus pocus where slush funds and inventory adjustment is used to “beat” the estimates.

      • BobbinThreadbare
      • 7 years ago

      Intel is a company that actually makes something.

      Since a bank’s product is shuffling paper around, it’s harder to tell whether or not they’ve moved the right papers.

        • MadManOriginal
        • 7 years ago

        Second sentence made me lol, so +1 for you.

    • HisDivineOrder
    • 7 years ago

    The PC market will continue to shrink as tablets and smartphones become more capable. However, this does not mean the PC market will die. It just means it’ll shrink. Either, Intel will have to successfully leverage its fab production to other companies (already experimenting with that), AMD will have to die (AMD’s doing its best to make sure this happens), Intel will have to convince people that PC’s can be made into superior devices when compared to current tablets and smartphones (Intel is trying with Ultrabook) or Intel will have to branch out to other devices other than PC’s (Intel’s failures with phones).

    If they get none of the above right, then they will shrink with the PC market.

      • NeelyCam
      • 7 years ago

      1) PC market did NOT shrink globally. Look at Intel’s report. Or do you still think that Gartner/IDC can measure the market better than Intel, after being wrong so many times?

      2) AMD will never die. It will just become Samsung’s Graphics Division.

      3) Too early to judge what will happen to Ultrabooks. I still think tablets are nothing but toys (I like my smartphone, though I would prefer it was rendering pages faster and didn’t have those “lemme freeze to think” moments)

      4) We all know that Intel will take over the smart phone chip business in 2014 – I most certainly wouldn’t call it a failure now

    • jjj
    • 7 years ago

    You shouldn’t jump to conclusions about ” the CPU market” based on total revenue.
    For Intel less than 2/3 of it’s revenue is from the Client Group (excludes Atom and server).
    For AMD some 1/3 of the revenue is from GPU and then you have the inventory in the channel that could be at very different levels.

      • NeelyCam
      • 7 years ago

      Well, Intel’s “Client Group” revenue increased, while Gartner said PC market was flat and AMD said their total revenue will decrease some 10%.. I think it’s a pretty fair to say that

      [quote<]All of this tells us AMD might be underperforming compared to its chief rival in the CPU market.[/quote<]

    • NeelyCam
    • 7 years ago

    Q2/11 had lower revenue, lower gross margin, but still higher income than Q2/12..? What happened..?

    EDIT: Oh, I see – Intel has increased its quarterly R&D spending by [b<]>25%[/b<] since Q2/11. And the ball keeps rolling...

      • SomeOtherGeek
      • 7 years ago

      And that is the smart plan. Good for them. They will keep coming up with new things and it will keep the company and jobs alive.

    • chuckula
    • 7 years ago

    Hrmm… economy headed for recession 2.0 and Intel still has revenue growth… That does it! PC’s are dead!

      • grantmeaname
      • 7 years ago

      That joke wasn’t funny the first time you made it. It hasn’t gotten funnier through repetition.

        • chuckula
        • 7 years ago

        Oh I’m completely serious and it’s no joke. RIM and Nokia are losing money too.. so… SMARTPHONES ARE DEAD TOO!

          • cegras
          • 7 years ago

          Shut up, seriously. If you speak with sarcasm it grew stale after the first time because no one here speaks like who you try to parody. If you speak seriously that is even more pathetic.

            • NeelyCam
            • 7 years ago

            Why so pissed off? Aren’t you happy that PC business is still growing..?

            Chuckula was making fun of analysts who [i<]do[/i<] speak like that, and I think it was appropriate. They (again) made the mistake of trying to lump AMD together with Intel.

            • derFunkenstein
            • 7 years ago

            Except that he said he was completely serious. If he said that in jest, then I think he might be trying to be a little too high-brow for the internet.

            • NeelyCam
            • 7 years ago

            Um.. yeah, that’s fair. He even reiterated that “it’s no joke”

            • MadManOriginal
            • 7 years ago

            Anyone who took post #4 by chucklua seriously needs to send their sarcasm meter in for repair.

            • cegras
            • 7 years ago

            I was responding to two comment train, but I can see how people would think I got trolled by his second comment. Meh.

            • cegras
            • 7 years ago

            I’m more tired about chuckula specifically than whatever intel’s financial results were.

            • tfp
            • 7 years ago

            I have a solution stop reading his posts…

            • cegras
            • 7 years ago

            I should devote special time and effort to avoid reading chuckula’s posts when browsing the comment section? In the time it takes one to actively avoid it any average person could have read that comment twice.

            • tfp
            • 7 years ago

            Or stop responding, but it’s fun to be trolled

            • ludi
            • 7 years ago

            j00 been trolled, sucka.

            • cegras
            • 7 years ago

            He sure made me mad

    • tbone8ty
    • 7 years ago

    oh jeez if Intel is this “weak” LOL i can’t imagine what thursday will be like for AMD…yikes!

      • sschaem
      • 7 years ago

      We already know, AMD told us. NEGATIVE 11%, while the PC market grew 3%.

Pin It on Pinterest

Share This